Three major Democratic campaign groups who received FTX donations promise to return money

The three major Democratic campaign groups said they would reserve over $2 million in donations received from the former crypto mogul, and eventually seek to return the money to FTX's disgruntled customers, reports the Washington Post.

"Given the allegations around potential campaign finance violations by Bankman-Fried, we are setting aside funds in order to return the $815,000 in contributions since 2020," said Daniel Wessel, a spokesman for the DNC. "We will return as soon as we receive proper direction in the legal proceedings."

A spokesman for the Democratic Senatorial Campaign Committee, David Bergstein, also said his group would set aside the $103,000 it received from Bankman-Fried. "We will return it as soon as we receive proper direction in the legal proceedings," he told the Post.

The spokesman for the Democratic Congressional Campaign Committee made a similar statement.

"We are waiting for further guidance from the government on what to do with the money based on their legal proceedings," Chris Taylor said of the $250,000 they received from the former FTX CEO.

On Tuesday, White House Press Secretary Karine Jean-Pierre refused to say if President Joe Biden will return campaign donations from FTX and Bankman-Fried.

In the 2021-2022 election cycle, Bankman-Fried contributed more than $40 million to political candidates and groups, becoming the second-largest Democratic donor after George Soros.

This fact was widely shared on social media, garnering the Democratic Party backlash.

At least $1-2 billion in customer funds was reportedly lost by FTX, reported CNBC last month. According to the U.S. Securities and Exchange Commission (SEC), FTX defrauded equity investors of approximately $1.8 billion.

The announcements from the Democratic groups — which funded the campaigns of House and Senate Democrats in the recent midterm elections — came just days after Bankman-Fried was arrested by Bahamian officials and charged with violating securities and campaign finance laws.

"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," said SEC Chair Gary Gensler. "The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws…To those platforms that don’t comply with our securities laws, the SEC's Enforcement Division is ready to take action."